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FM AMEMBASSY PORT LOUIS
TO RUEHC/SECSTATE WASHDC 4439
INFO RUEHBJ/AMEMBASSY BEIJING 0254
RUEHOO/CHINA POSTS COLLECTIVE
RUEHZO/AFRICAN UNION COLLECTIVE
RULSJGI/CIA WASHINGTON DC

C O N F I D E N T I A L SECTION 01 OF 04 PORT LOUIS 000064 
 
SIPDIS 
 
DEPT FOR AF/E AND AF/EPS 
 
E.O.  12958: DECL 02/19/2029 
TAGS: PGOV EAGR EFIN MARR PREL SENV TRGY CH MP
SUBJECT: CHINESE PRESIDENT SPREADS LARGESSE AND BRUISES 
FEELINGS IN MAURITIUS 
 
REF: A. PORT LOUIS 44 
     ¶B. 2008 PORT LOUIS 142 
 
Classified by Charge d'Affaires Virginia Blaser for reasons 
1.4 (b and d). 
 
¶1. (C) SUMMARY: Although diplomatic relations between China 
and Mauritius date back to 1972, the first visit to Mauritius 
of a Chinese President took place this week from February 16- 
¶17.  President Hu Jintao visited Mauritius as part of a four- 
leg African tour that also included Senegal, Mali, and 
Tanzania.  Eager to please, the Prime Minister made public 
statements during the visit that some observers considered 
pandering.   And GOM willingness to accede to every 
logistical demand made by the Chinese government caused 
economic disruption, school closings, and wide-ranging 
complaints among the public.  The GOM considers the visit 
well worth the complaints of locals, however, as it led to 
new bilateral cooperation agreements amounting in value of 
approximately USD 281 million.  END SUMMARY. 
 
------------------ 
SEEDS FOR A VISIT 
------------------ 
 
¶2. (U) In July 2007, during his week-long visit to China to 
discuss bilateral trade and investment cooperation and attend 
the China-Africa Summit, Mauritian Prime Minister (PM) Navin 
Ramgoolam invited Chinese President Hu Jintao to Mauritius. 
It seems as if the pitch made by Ramgoolam and his delegation 
in 2007 convinced China of the potential strategic advantages 
of a stronger relationship, because on February 16-17, for 
the first time in the history of their diplomatic relations, 
the Chinese president visited Mauritius. 
 
-------------------------------------------- 
CONTEXT: PRE-VISIT STATUS OF BILATERAL TRADE 
-------------------------------------------- 
 
¶3. (U) The visit took place in an already healthy bilateral 
trade partnership.   China is a major trading partner of 
Mauritius, and the relationship is readily expanding.  Total 
trade between the two countries grew by 35 percent in 2007, 
from USD 322 million in 2006 to USD 434 million.  Imports 
from China amounted to USD 330 million in the first 9 months 
of 2008, which represents 11 percent of total Mauritian 
imports.  China is the second largest source of imports for 
Mauritius, after India.  Chinese imports to Mauritius include 
basic consumer goods, household/electrical appliances, 
motorcycles, hardware, communication equipment, paper, 
plywood, chemicals, tires, textiles and apparel, and 
foodstuffs.  Exports to China are negligible, accounting for 
0.2 percent of total Mauritian exports in 2007. 
 
--------------------------------------------- ---------- 
CONTEXT: PRE-VISIT STATUS OF CHINESE AID AND INVESTMENT 
--------------------------------------------- ------- 
 
¶4. (SBU) Mauritius has received aid from China ever since the 
two countries established diplomatic relations in 1972. 
Chinese aid, mostly in the form of interest-free or low- 
interest loans, is channeled principally into infrastructure 
projects, such as health and sports facilities, an airport 
terminal, low-cost housing, and sewage projects. 
 
¶5. (SBU) As another example of Chinese aid, in April 2008, 
the Mauritius Police Force signed an agreement with the 
Chinese Institute of Research to install 300 surveillance 
cameras in the tourist-laden North of the island, as part of 
a program to combat crimes in tourist areas.  The project is 
estimated at USD 4 million.  China is also financing the new 
headquarters for the national radio/TV station, which is 
currently under construction.  The project is estimated at 
USD 13 million. 
 
¶6. (SBU) In recent years, three Chinese telecommunication 
companies (Huawei Technologies, Haier Mobile, and ZTE) opened 
their regional headquarters in Mauritius to service the local 
users and the Indian Ocean and African markets.  In addition, 
three construction firms (Chan Chen Esquares, China Jiang 
Shu, and Tianli Construction), have offices in Mauritius and 
are currently involved in several construction projects, 
using mostly Chinese labor.  In the Freeport (free trade 
zone), five Chinese companies are engaged in import/export 
activities in general goods supplying the markets in this 
region.  The most recent investment is by Luo Fude, which 
recently began construction of a USD 5 million paper 
 
PORT LOUIS 00000064  002 OF 004 
 
 
recycling plant in La Tour Koenig industrial zone. 
 
¶7. (C) The Shanxi Tianli Enterprise Group (STEG) plans to 
invest massively to create the Mauritius Tianli Economic and 
Trade Cooperation Zone near the Mauritius port.  The total 
cost of the project, the largest ever foreign direct 
investment in Mauritius to date, is estimated at about USD 
500 million and is expected to generate 42,000 jobs in the 
next five years.  The project expects to attract Chinese 
investors in a wide range of sectors, including 
manufacturing, information technology, property development, 
tourism and leisure, health, logistics, and services. 
Construction works on the first phase of the project, 
scheduled for early 2008, are now expected to start by mid- 
¶2009.  The construction delay is said to be a result of local 
government change in the Chinese province of Shanxi, which is 
also supporting the project.  The new governor was in 
Mauritius at the beginning of February 2009, ahead of the 
President's visit, to reaffirm their support of the project. 
China Development Bank is the principal financier of the 
zone, which is to be one of the five offshore bases for 
Chinese commercial activity in Africa.  Earlier in 2003, STEG 
invested USD 27 million in a large cotton spinning plant, 
which is supplying yarn to both local and export markets. 
 
¶8. (C) Post contacts like Rajcoomar Bikoo, Director of 
Technical Services for the Ministry of Public Utilities, 
cites poor performance of Chinese companies' awarded tenders 
in the past for a reason to be leery of Chinese investment. 
The local press reports that trade unionists and government 
officials are worried about an influx of Chinese laborers and 
an increased black market of substandard equipment and 
services.  Public suspicions prompted Ambassador Yuchen to 
defend the Tianli project, in a 13 February interview in the 
L'express daily, as a project that will "generate many jobs 
for Mauritians and diversify local production."  He added 
that Tianli would not be a "Chinese enclave," meaning that 
there should be no fear of an influx of Chinese labor. 
 
--------------------------------- 
LOGISTICAL AND SECURITY PLANNING 
--------------------------------- 
 
¶9. (C) According to a number of high-ranking Embassy 
contacts, the visit was difficult to schedule.  On February 
2, Permanent Secretary Fong-Weng Poorun told POLOFF that that 
Mauritian determination to meet the stringent demands of the 
Chinese was not being reciprocated.  She commented that the 
advance Chinese protocol team of 11 persons that arrived on 
January 13 had to be prodded to accept Mauritius holding 
their traditional honorary banquet for the President, and 
even when the Chinese accepted, the normal program was 
truncated.  Fong-Weng said that Hu Jintao's schedule would be 
"fluffy" and consist of a meeting with the President, Prime 
Minister, leader of the opposition, the traditional visit to 
the botanical gardens, and a signing of bilateral treaties to 
initiate already discussed projects.  According to Fong-Weng, 
Hu Jintao's visit to the Tianli project and STEG were turned 
down by STEG representatives because they were "not ready to 
for a meeting by the President." Fong-Weng seemed not 
impressed with the visit, and suggested Hu Jintao was 
treating Mauritius like a "quick stop" on his four leg tour. 
 
¶10. (C) Before and during the visit, Police Commissioner 
Rampersad vented privately to EmbOffs that the level of 
security requirements from the Chinese was "unprecedented" 
and that the Mauritian people would not like closed roads or 
the removal of speed bumps.  Other measures demanded, and 
acceded to by the GOM, included shutting down shops and 
businesses along the routes of the President's motorcade, 
lining hundreds of police officers (roughly one every 300 
meters) along the highway to and from the airport, and 
blocking the one main highway on the island in both 
directions some three hours before the motorcade traveled in 
the area.  Due to the expected traffic problems caused by 
these demands, the Mauritian Government elected to shut down 
the government for the duration of the visit and to require 
all schools, public and private, to shut down for the same 
period.  During the State Dinner on February 16, Rampersad 
told Charge that his forces were too thin on the ground and 
were serving "ineffectual purposes."  He believed the 
security measures were unnecessary, especially as there was 
no "identified or other threat against the Chinese 
President." 
 
------------------------------------------- 
PUBLIC HOSTAGE TO HU JINTAU, SAYS THE PRESS 
 
PORT LOUIS 00000064  003 OF 004 
 
 
------------------------------------------- 
 
¶11. (C) The Government was silent in responding to concerns 
in press and the public about the visit.  The Government made 
no counter arguments to press stories such as "Drivers Taken 
as Hostages of Hu Jintao" (Le Defi Plus, February 15) and 
"China, the Friend Who Scares Us," (L'express Dimanche, 
February 15).   As another example of the GOM's desire to 
please the Chinese, according to press articles, Amnesty 
International's application for a demonstration was, for the 
first time in its history in Mauritius, denied.  They had 
planned a peaceful demonstration against China's human rights 
abuses. 
 
--------------------------------------------- - 
PRIME MINISTER USES VISIT TO PLEAD FOR MORE... 
--------------------------------------------- - 
 
¶12. (SBU) During the State Dinner on February 16, the PM 
highlighted Mauritius? adoption of the one-China policy 
decades ago, noting that Mauritius went ahead with the move 
despite "immense pressure."  He praised China's ability to 
weather the international financial crisis, adding that "Now 
the world waits with bated breath for China to play its part 
for the world economies to recover from this global 
recession.   Those who extolled the virtues of free-market 
capitalism and dreamt of a global free-market have been 
proved decisively wrong.   It is today clear that Adam 
Smith's invisible hand can wreck (sic) havoc - we need the 
firm, guiding hand of Central Government."  And he heralded 
China as a "rare beacon of hope," adding that he is confident 
that China "will continue to stand by countries less 
fortunate than itself." 
 
¶13. (C) Many event attendees -- from foreign diplomats to 
senior Mauritian government officials -- privately made 
negative comments about the speech, calling it "over the 
top," and "pandering." One Mauritian Government official was 
visibly agitated over the speech, commenting "Now do you see 
the problem we have because of the people who surround the 
Prime Minister these days?" 
 
--------------- 
...AND GETS IT 
--------------- 
 
 
¶14. (C) During an 18 February private meeting with Charge, 
the Prime Minister expressed his contentment over the success 
of the visit.  When asked about his negative free trade 
comments which he made during the State Dinner, the Prime 
Minister said proudly that he wrote this portion of the 
speech himself, and that it was intended to send a message 
"to a few specific people." He was pleased that the "Chinese 
President really seemed to like that part." He added that he 
had been told by credible sources that the trip to Mauritius 
was the President's favorite stop.  The Prime Minister also 
raved in public over the results of the visit. 
 
¶15. (U) During the visit, Hu Jintao and Ramgoolam signed a 
number of agreements, which include: 
 
- A preferential Buyers' Credit Loan Agreement, in which the 
Export-Import Bank of China provided a loan of USD 270 
million at two percent interest to finance the extension of 
the airport terminal. 
 
- An Interest-free Loan Agreement of USD 6.2 million and a 
grant agreement of USD 4.7 million to be used to finance 
still-to-be identified infrastructure projects. 
 
- Promises for Chinese loan agreements for a harbor bridge 
and the Terre Rouge-Verdun road to ease traffic congestion in 
Port Louis. 
 
------- 
COMMENT 
------- 
 
¶16. (C) The Government of Mauritius, and especially the Prime 
Minister, bent over backward to please the visiting 
delegation.   It seemed that pleasing the Chinese was more 
important than freedom of speech (hence the rejection of the 
properly filed Amnesty International petition) and that 
little concern was given to the negative impact and 
impression it left on the people of the island.  Mauritius 
will continue to play to its strengths as a stable country 
 
PORT LOUIS 00000064  004 OF 004 
 
 
with preferential access to regional markets to attract the 
most Chinese investment possible.  The President's visit, the 
subsequent loan agreements, and the Tianli project show that 
the Chinese are open to exploring a broadened economic 
relationship with Mauritius.  The Chinese aggressive approach 
to the Mauritian market may be tempered, however, by Mauritius' 
small market size, trade unions, and public suspicion of 
Chinese intentions. 
 
BLASER